Division of assets in a divorce is a complex process. But when a marital business is up for division, it can cause more complications since it is a property that courts usually cannot physically divide among parties. This is why the courts look at certain factors to determine the appropriate property division in a divorce case.
Florida follows the equitable distribution of marital assets, including businesses. One should note that equitable distribution does not necessarily mean equal division. The courts consider the following factors when deciding what is equitable:
- The value of the business based on profits and the market
- The value of intangible assets, such as goodwill
- Each spouse’s financial and time contribution
Parties usually seek assistance from professional valuators to properly determine the value of the business and relevant assets.
Ways to divide the business
There are different ways to divide a business in a divorce. It all depends on the unique facts and circumstances of each divorce case. The common methods of dividing a business property in a divorce are as follows:
- Buyout: One of the ex-spouses buys the interest of the other in the marital business.
- Joint ownership: The parties can continue owning and running the business as joint partners.
- Sell and divide: The ex-spouses can also choose to sell the business and split the payment between them.
The best option for parties will depend on certain relevant factors, such as whether they get along well enough to stay as business partners or if the business is no longer profitable for them. Parties should look into the advantages and disadvantages of each division method to determine which would be most beneficial for them.